Chancellor Rachel Reeves is planning £40bn in tax increases and spending cuts in the upcoming Budget, according to government sources.

At a recent cabinet meeting, Reeves told ministers that addressing the "£22bn black hole" left by the previous government would only maintain current public service levels. To avoid real-terms cuts, she is now looking for £40bn in savings.

Reeves has warned of tough decisions on spending, welfare, and taxes, with her first Budget set for 30 October. She has ruled out austerity and promised increased investment to boost growth, but has set a borrowing rule requiring day-to-day spending to be funded by taxes, not borrowing.

A Treasury spokesperson declined to comment on tax speculation.

Julia Hartley-Brewer speaks with former Labour Party spokesperson, James Matthewson.

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